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What Are the Trade-Offs with Cheap Cell Phone Service?
Is it worth it to pay big bucks to AT&T, Verizon, and T-Mobile when you can save hundreds of dollars a year by using an MVNO?
First of all, what is an MVNO? MVNO stands for Mobile Virtual Network Operator. Basically, it’s a company that buys phone and data service wholesale from one or more of the Big Three (AT&T/Verizon/T-Mobile) cell phone providers and resells that service under their own brand. By becoming the middle man they save you money. Some MVNOs are owned by the Big Three themselves and represent their way of offering budget service under a different banner.
Why is an MVNO cheaper than one of the Big Three cell providers? In general, MVNOs don’t have the retail footprint of the Big Three providers. You’re not going to see a physical store for most of the 100+ MVNOs operating in the United States. When you do not have to pay rent on retail space, you can afford to charge less for service. MVNOs also don’t have the staff that the Big Three providers maintain. When you do not have to pay workers to provide nationwide service, you can afford to charge less for service. Most MVNOs don’t advertise as much as the Big Three carriers do, resulting in cost savings. To sum it up, by not spending a lot of money, MVNOs don’t have to charge a lot of money to provide service to their customers.
